The move comes after the introduction of Seed EIS (SEIS) and the marked enhancements to EIS in the Finance Act.

Mercia Fund Management believes a hybrid fund will provide investors with a combination of maximised tax efficiency and the flexibility to invest in either EIS or SEIS from the same fund.

The firm has a background in backing university spin outs as well as non-university investments such as LM Technologies through its first fund –Mercia Fund 1 – which partners both Warwick University and the University of Birmingham, gaining access to proprietary investment opportunities with protectable intellectual property.

Dr. Mark Payton, managing director of Mercia Fund Management said: “Mercia Growth Fund is perfectly positioned to help high earners seeking tax efficient investments. We see our new hybrid fund building on the successes of Mercia Funds 1 and 2 which have collectively invested in excess of £9 million and leveraged additional funding of circa £50 million in 34 businesses to date.”

The Mercia Growth Fund closes on October 31, but may close sooner if the investment target is reached.